Energy regulator pushing for system audit of National Grid

Energy Regulatory Commission
chairman Jose Vicente Salazar expressed confidence National Grid Corporation of
the Philippines will push through with its earlier commitment to back the
system audit of the country’s power grid system.

Salazar said the audit would be the
first compliance assessment of NGCP since receiving the franchise to operate,
maintain and expand the country’s power transmission system in 2008.

The audit aims to assess how NGCP is
operating the grid, how it is maintaining the reliability of the country’s
transmission system, and how its operations comply with regulations concerning
the wholesale electricity spot market.

Salazar issued the statement amid
reports that NGCP “appears to be reluctant to pursue its earlier commitment to
fully cooperate with the audit.”

Salazar said the ERC was concerned
that delays in the audit of NGCP “could adversely affect the processing of the
applications for its capital expenditure and revenue requirements” pending
before the regulatory body.

“It is important that we have a
clear assessment first of how it is doing its job before we consider the NGCP’s
petition to raise the level of revenues it is allowed to make and to use money
on capital expenditures,” Salazar said.

He said the performance audit of the
NGCP was also crucial “to the country’s bid to ensure that the whole power
supply infrastructure from generation to distribution to industries and
households continue to be efficient, reliable and cost-effective.”

Salazar said the audit of the NGCP
was set to be done by an independent third party to be procured by NGCP itself.

“I am sure the NGCP understands the
importance of this independent audit to our shared aspiration to further
improve the power transmission infrastructure of the country and to speed up
the processing of their requirements,” Salazar said.

The NGCP has asked the ERC to raise
its maximum annual revenue to P45.2 billion and grant its application for
additional capital expenditure of P8.05 billion in 2016.

Salazar said the audit of the NGCP
would also boost the transparency of the regulatory process in the power
sector.

“The customers of the power sector
demand to know how the important industry players are performing in order to
assess the value they get for the money they pay for power,” Salazar said.

“Since the NGCP is being run by some
of the country’s most respected business leaders, I am sure that it knows the
importance of a transparent audit,” Salazar added.

He said the ERC was duty-bound under
existing laws to ensure such audit took place.